Costly power deals near end: Tanesco

A gas-fired power plant in Dar es Salaam. Three major private power producers plan to move away from thermal power, which is expensive compared to using gas to produce electricity. PHOTO | FILE 

By Ludger Kasumuni The Citizen Reporter

In Summary

“What I know is that Ewura has the modality of reviewing power tariffs with advice from consultants. Under the law, they review power tariffs after every three years,” said the Tanesco chief.

Dar es Salaam. Tanzania Electric Supply Company’s contracts with private companies that produce electricity come to an end effetive in October, signalling a major relief to the state-run power utility firm which currently grapples with a huge burden of operational costs.

Addressing reporters in the city yesterday, Tanesco managing director Felchesmi Mramba said that the companies, which include Symbion Power, Aggreko and Independent Power Tanzania Limited (IPTL), will be in the process of converting their power generation machines from expensive fuel-powered to gas-fired energy which is a lot cheaper.

“Termination of contracts with these companies will start in October. We expect that the gas pipeline from Mtwara to Dar es Salaam will be completed by the end of this year. This is also expected to reduce the cost of power generation,” he said.

Currently, Tanzania has a debt of over Sh400 billion in arrears for the expansive thermal power companies, Mr Mramba said.

When asked to explain the possibility of reducing power tariffs with the shift to a cheap source of energy, the Tanesco boss was noncommittal, saying only the Energy and Water Utilities Regulatory Authority (Ewura) has the mandate to alter power charges.

He, however, said that stakeholders have the right to demand power tariff reduction through Ewura.

“What I know is that Ewura has the modality of reviewing power tariffs with advice from consultants. Under the law, they review power tariffs after every three years,” said the Tanesco chief.

Earlier, Mr Mramba said that the major objective of convening Powering Africa-Tanzania Conference that began yesterday was to attract energy investors around the world in an effort to increase energy supply.

According to him, the country has a target of investing at least Sh6.4 trillion in the energy sector through private-public sector partnerships.

Organised by the Energy Net Limited and attended by more than 200 delegates from several countries, the conference aims at creating a platform for providing opportunities for Tanzania to examine future transformation of the energy landscape, according to a report released by the international company based in the UK.